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IN THE HIGH COURT OF ALLAHABAD
K. N. Singh and S. J. Hyder, JJ.
JIYA LAL - Appellant
Versus
STATE OF U.P. - Respondents
Civil Misc. Writ Petn. 96 Of 1976
Decided On : 01/13/1981
TOLLS - LEVY - INDIAN TOLLS ACT, 1851 - SECTION 2 - TOLLS LEVIED ON BRIDGE - INTERPRETATION - INTEREST ON COST OF CONSTRUCTION - COLLECTION CHARGES - MAINTENANCE COSTS - WRIT PETITION - MANDAMUS ISSUED.
Fact of the Case:
The petitioners, holders of Stage Carriage Permits, challenged the levy of tolls on a bridge constructed by the State Government, arguing that the tolls were excessive and included interest on the cost of construction, collection charges, and maintenance costs.
Finding of the Court:
The court held that the levy of tolls under Section 2 of the Indian Tolls Act, 1851, was permissible only to meet the cost of construction of the bridge or its approach road, and any extraordinary repairs necessary to maintain its stability. The court found that the State Government was not justified in charging interest on the amount spent on construction, as it had not borrowed any money for the project and had not paid any interest on the sum spent. The court also held that the collection charges were a legitimate expense, but that the maintenance costs were not.
Issues: 1. Whether the State Government was justified in charging interest on the amount spent on the construction of the bridge. 2. Whether the collection charges were a legitimate expense. 3. Whether the maintenance costs were chargeable under Section 2 of the Indian Tolls Act, 1851.
Ratio Decidendi: 1. The court held that the State Government was not justified in charging interest on the amount spent on the construction of the bridge, as it had not borrowed any money for the project and had not paid any interest on the sum spent. The court found that the notional interest worked out on the actual expenditure made from the general revenues in the construction would go on accumulating and the levy of toll would become perpetual so long as the bridge continues to exist. This is not the intention behind Section 2 of the Act of 1851. 2. The court held that the collection charges were a legitimate expense, as the collection of tolls had to be entrusted to a separate staff and the cost incurred in employing such staff was a legitimate charge which should be taken into account in working out the actual amount realized by the Government towards the cost of construction. 3. The court held that the maintenance costs were not chargeable under Section 2 of the Indian Tolls Act, 1851, as the maintenance of a structure is a routine activity which has to be distinguished from its repairs. The object of the maintenance of a structure is to prevent its falling into decay. On the other hand, the word repair indicates the restoration to a good and sound condition of a structure which has been decayed or damaged.
Final Decision: The court issued a writ of mandamus to the respondents not to realize any toll tax from the petitioners under Section 2 of the Indian Tolls Act of 1851 read with Section 3 of the Act 15 of 1864.
( 1 ) THE controversy in this writ petition covered a wide range during the course of the arguments at the bar. We feel that it would not be necessary for us to deal with all the submissions urged on behalf of the parties as this writ petition must succeed on a short point.
( 2 ) THE petitioners, who are eleven in number, are holders of Stage Carriage Permits. Their vehicles ply on Muzaffarnagar Charthawal Garni Kalan route. On the said route, just before chartha-wal, the road crosses the river Hindan. In the year 1965, the State of U. P. constructed a bridge of sufficient strength to allow heavy vehicles to pass over it. A total sum of Rs. 6,70,000/was spent by the State Government on the construction of the bridge and its approach roads. There is no serious controversy between the parties in so far as these facts are concerned.
( 3 ) THE Indian Legislature passed Indian Tolls Act, 1851 (hereinafter referred to as the Act of 1851 ). It is an Act enabling the Government to levy tolls on public roads and bridges. The said act did not initially apply to the areas now forming part of the State of Uttar Pradesh. However, the Legislature passed another Act known as the Tolls Act (Act 15 of 1864 ). Section 3 of Act 15 of 1864 empowers the State Government of any area to which Act of 1851 did not apply to extend the provisions of the said Act in respect of such area. It is common ground between the parties that the Act 1851 has been extended by the State of Uttar Pradesh to the territories forming part of the State.
( 4 ) SECTION 2 of Act of 1851, inter alia, lays down that the Government may cause such toll as it thinks fit to be levied on any road or bridge which had been or was thereafter to be made or repaired at the instance of the Central Government or any State Government; and to place the collection of such tolls under the management of such persons as may appear to it proper. Section 8 of that Act also lays down that the tolls levied under this Act shall be deemed to be public revenue. The Act also contains ancillary provisions for giving effect to the provisions contained in Section 2 referred to above.
( 5 ) THE concept of tolls has its roots in the history of England and was at one time closely interlinked with the feudal society which prevailed there. It will be unnecessary pedantry to trace the growth of this levy in the various forms in which it was imposed in that country. Suffice it to say that toll is now an important part of public finance and is recognised by the Indian constitution.
( 6 ) THE language of Section 2 of the Act of 1851 itself indicates the criteria on which the tolls can be levied on construction of bridges. According to the words used therein, there has to be a reasonable nexus between the levy and the amount spent by the Government in the construction or the repair of the road or bridge. (See Maheshwari Singh v. State of Bihar, AIR 1966 Pat 462)and (Mohammad Ibrahim v. State of Uttar Pradesh, AIR 1967 All 24 ).
( 7 ) TOLL may not be a fee in the strict sense. It is nevertheless a compensatory tax. The main object of the Act of 1851 is to arm the Government with the power to realise the amount which may be spent by it either in the construction or repair of a bridge. The power conferred on the government under the Act of 1851 cannot be called in aid by the State Government for augmenting its general revenues. On November 10, 1965, the State Government issued a notification under Section 2 of the Act of 1851. The said notification, inter alia, provided that for so long as the total cost of the construction of bridge had not been realised in full or for a period of 20 years from the date of the first levy of tolls on the bridge, the Government shall continue to realise tax on all bridges which were to be constructed after July 21, 1956. A schedule of rates on the basis of which the tolls were to be realised was appended to the notification. After the said notification, number of other notif
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